Other things being equal,when the price level rises,the real value of money holdings ________; when the domestic price level falls,the real value of money holdings ________.
A)rises; falls
B)falls; is not affected
C)falls; rises
D)is not affected; falls
E)is not affected; rises

Question

Quizplus · Accepted Answer

When the price level rises, the real value of money holdings falls because each unit of money can purchase fewer goods and services. Conversely, when the domestic price level falls, the real value of money holdings rises because each unit of money can purchase more goods and services.

Other Things Being Equal,when the Price Level Rises,the Real Value